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IMM: USD short grows to $25.1 billion; highest in more than a year

The USD net short position grew wider last week, with speculators on the CME sending the currency into territory last seen in the third quarter of 2011, as concerns about the bearish effects of the US Federal Reserve’s latest round of quantitative easing continue.

The latest Commitment of Traders report, issued by the Commodity Futures Trading Commission, shows the value of the net short USD position at $25.1 billion in the week to September 25, which is a $9.1 billion increase in the size of the short seen on September 18.

 USD Net Shorts highest in more than a year on QE concerns

The EUR continued its trend of narrowing the short position, as a 9% increase in the longs brought the single currency net short to $8.1 billion, a week-on-week change toward positive territory of $3.88 billion. The EUR now has the smallest net short position since September 2011 and the largest gross long seen since June.

Meanwhile, investors pared back their CAD longs by $741 million, which was the first decline in the net long position in two months. Nonetheless, it remains in net long territory, of $10.7 billion, which Scotiabank currency strategist Camilla Sutton says makes it “the most favoured currency among speculators”.

The CAD’s continued strength in North America was rivaled last week by the MXN, which grew to a new record high of $5.5 billion, which Sutton says gives last week’s IMMs a distinctly “Nafta [North American Free Trade Agreement] theme”.

 CAD continues to be the speculators long of choice

Sutton also says that rumours of additional Chinese government economic stimulus measures saw the AUD long position reach a 2012 high of $9.3 billion, a week-on-week change of $2.06 billion. Marc Chandler, Brown Brothers Harriman’s global head of currency strategy, adds that the GBP net long grew to $2.74 billion, a week-on-week change of $1.28 billion, giving sterling its largest net long position since May 2011.

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